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Bhopal City
Madhya Pradesh first state to invest in defence manufacturing units

BHOPAL: Madhya Pradesh has become the first state to formulate defence products investment policy in the country. The Central Government has prepared guidelines for public undertakings to set up joint ventures for defence manufacturing units with private sector.

According to sources, in view of strong possibilities of investment in defence sector, the state government has formulated investment policy for defence products to investors investing Rs 500-crore or more in these units.

Under the policy, land will be allotted on priority to such units. Concerning collector will provide up to 50 acre undeveloped government land at the rate of 25 per cent price of unirrigated agriculture land on collector guideline rate. Concession of 75 per cent will be given in current lease rent.

Besides, vendor units of defence manufacturing plants will be allotted land on sub-lease. Facilities like mother units will be provided to vendor units of big industries if vendor units sell 75 percent of their products to mother units. Stamp duty will be reimbursed on purchase of closed, sick or acquired units for setting up defence manufacturing units.

Under the policy, 50 per cent subsidy will be given on expenditure on power, water and road infrastructure to be created on undeveloped land by defence equipments manufacturing units. Units making permanent investment of Rs 500-crore will be exempted from entry tax and 2 years exemption from power tariff.

They will be given benefits under investment promotion assistance scheme. Fifty per cent or maximum Rs 2-crore of expenditure on transport of imported machinery from seaport to venue will be given.


Through the policy, 100 acre land will be allotted on concessional rates to projects investing Rs 1000-crore or more. Road and power will be developed and made available by government. Besides, 100 per cent reimbursement will be made on stamp duty and registration fee on registry of units to be set up in joint venture with Defence Ministry’s units.